To me though, the real excitement of the Randgold story is not what has gone - considerable though the achievements in building the group's mining profile has been - but the company's retained development scope. It is possibly 'easy' to get low operating costs one year but to continue to achieve this requires the additional mixer of grade i.e. the amount of gold in a tonne of earth. The below chart was the most important one in the presentation pack as it shows the company continuing to hit a grade level of at least 3g/tonne for the next four years. At a time when many of Randgold's sector peers are scrabbling around at 1g+/tonne, the reason for the company's continuing control of total cash costs becomes clear. That production continues to glide up too is a bonus.
The star operation remains the Loulo-Gounkoto mine in Mali as shown by the juxtaposition of rising grade and falling cost.
I was not surprised to see the shares gain around 6% in the London market today. £50 is clearly an interim target point for the shares but I am hopeful they should trade much higher given the positive uniqueness of grade, cash cost control and production growth - let alone prospects for the gold price per se. Additionally - as shown by their 'resource triangle' the company remains busy at all their major mining sites looking for new discoveries.
Issues? Apart from the inevitable unknowns around political risk (I note that the company continues to have the most successful political/social interaction policies in the sector), I note that the dividend was left unchanged and even a scrip dividend was offered. Randgold is not a yield stock (<1% dividend yield) but with (small) net cash on the balance sheet and the positive fundamentals above, I thought a small hike could have been financed.
Overall though this is a minor issue. I remain long with a target of £50+.